Tata Chemicals Shares: Tata Chemicals’ share price surged over 10 per cent in the morning session on Monday after the company reported a multi-fold jump in consolidated profit after tax at Rs 470.24 crore for the quarter ended March. The stock of Tata Group commodity chemicals company had hit a 52-week high of Rs 1,158 crore on October 18, 2021. At 11:18 AM, it traded 10.616 per cent higher as compared to a 0.59 per cent fall in the S&P BSE Sensex at Rs 1,039 apiece.
According to a regulatory filing, the consolidated income from operations grew 32 per cent during the quarter under review to Rs 3,481 crore. In the same period a year ago, it stood at Rs 2,636 crore. For the entire financial year 2021-22, Tata Chemicals’ profit after tax on a consolidated basis zoomed 221 per cent to Rs 1,400 crore, as compared to Rs 436 crore in the previous fiscal.
“While the global demand environment continues to be positive across our products and their applications, the supply-side environment, especially energy and input costs, remain at elevated levels along with logistical challenges that continue to be seen in the market.
“The team has responded well to ensure customers are served with agility,” Tata Chemicals Managing Director and CEO R Mukundan said.
Tata Chemicals – Should You Buy, Sell or Hold?
“The company witnessed an improvement in soda ash realization across all units. Since there is an improvement in the demand environment across end-user industries along with no large capacity addition across the globe to support soda ash prices ahead,” ICICI Securities said in a note.
Tata Chemicals is a leading supplier of choice to glass, detergent, industrial and chemical sectors. The company has a strong position in the crop protection business through its subsidiary company Rallis India.
“On a one-year forward basis, Tata Chemicals traded at an average EV/EBITDA of 8.8x over the last 10 years. It is now trading at 10.6x FY23E EV/EBITDA, implying a premium of 20 per cent. We expect a revenue/EBITDA/PAT CAGR of 14 per cent / 13 per cent / 6 per cent over FY22-24. Factoring the strong operating performance in Q4-FY22, we have raised our FY23/FY24 EBITDA estimate by 5 per cent each. We maintain our Neutral rating with a SoTP-based target price of Rs 1,045/share,” wrote analysts at Motilal Oswal Securities in a post result note.
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